URGENT UPDATE: The South Korean won rebounded sharply this morning after government officials stepped in to stabilize the currency, which had hit a seven-month low. Following a market-monitoring meeting on November 14, 2025, Deputy Prime Minister and Finance Minister Koo Yun-cheol confirmed the government’s commitment to address the currency’s decline, resulting in the won strengthening to around 1,450 per dollar.
Authorities acted quickly, using a combination of verbal warnings and likely dollar-selling to counterbalance the currency’s drop. The won had previously traded in the mid-1,470 range, setting off alarm bells among policymakers. Koo expressed concerns about the increasing foreign investments impacting the foreign-exchange supply and demand, emphasizing the immediate need for structural improvements.
“If the imbalance persists, expectations of a weaker won may become entrenched,” Koo warned, highlighting the urgency of the situation. He stressed the importance of “actively using available policy tools” to stabilize the market.
In a remarkable turn, the won strengthened from 1,475.4 to 1,455.9 per dollar shortly after Koo’s comments. The dollar-won pair opened at 1,471.9 and briefly climbed before retreating, signaling the market’s volatile response to the government’s intervention.
FX analysts noted that market participants welcomed the government’s message, as the won had weakened unjustifiably due to supply-demand distortions rather than economic fundamentals. They anticipate further coordinated efforts with major players like the National Pension Service (NPS) and large exporters to reinforce the upper trading range of the won.
CRUCIAL INTERVENTION: Despite the swift recovery, traders indicated that the rebound seemed too sharp to be attributed solely to verbal intervention, hinting at possible smoothing operations involving small-scale dollar-selling to counter erratic market movements. “There were signs of actual intervention around the comments,” reported a senior currency dealer at a local bank.
However, experts caution that Friday’s rebound does little to alter the broader landscape of dollar strength and geopolitical uncertainties. The government’s proactive approach likely stems from fears that the won could surpass 1,480 without stronger policy signals, especially after breaching the 1,470 level earlier this week.
The currency’s decline had reached its weakest point since April 9 this year, when it hit 1,484.1 amid escalating tensions between the U.S. and China. Current trading levels are reminiscent of those seen during a political crisis in South Korea, when the won fluctuated dramatically due to market instability.
HUMAN IMPACT: Analysts attribute the won’s struggles to heavy foreign selling in the Kospi, as global investors took profits from recent gains in Korean equities. Additionally, persistent dollar demand from retail investors seeking overseas assets has compounded the pressure on the won.
The currency has now spent 31 consecutive trading days above 1,400 per dollar, with economists warning it could approach 1,500 by year-end if current trends persist. As of shortly before noon on Friday, the won was trading at 1,459.5 per dollar, underscoring the volatility in the market.
As this situation develops, market participants and everyday citizens alike will be watching closely to see how government interventions shape the future of the won and impact the South Korean economy.
